Pradhan Mantri Mudra Yojana (PMMY) provides collateral-free loans to micro and small businesses — shopkeepers, vendors, artisans, tailors, repair shops, food stalls, transporters and small manufacturers — through banks, NBFCs and micro-finance institutions. The goal is to “fund the unfunded” entrepreneurs who cannot offer security for a regular business loan.
Loan Categories
| Category | Loan amount | Best suited for |
|---|---|---|
| Shishu | Up to ₹50,000 | New units and very small working-capital needs |
| Kishor | ₹50,001 to ₹5 lakh | Running businesses that want to expand |
| Tarun | ₹5 lakh to ₹10 lakh | Established units scaling up |
| Tarun Plus | Up to ₹20 lakh | Borrowers who have successfully repaid a Tarun loan (added in the 2024 expansion) |
Key Features
- No collateral: loans are covered under a government credit-guarantee arrangement instead of security.
- Available for manufacturing, trading, services and allied-agriculture activities (not for crop loans).
- Interest rates are set by the lender based on RBI guidelines and your profile — compare 2–3 lenders before applying.
- A MUDRA RuPay card can be issued for working-capital withdrawal.
Who Can Apply?
- Any Indian citizen with a viable business plan for a non-farm income-generating activity.
- Individuals, proprietorships, partnerships, and small companies are all eligible.
- The applicant should not be a defaulter with any bank.
Documents Required
- Identity and address proof (Aadhaar, PAN, voter ID)
- Business proof: registration/licence, quotation of machinery to be purchased, or an activity plan for new units
- Bank statements (usually last 6 months, for existing businesses)
- Passport-size photographs
How to Apply
- Offline: approach any bank branch, small-finance bank, NBFC or MFI with your documents and business plan.
- Online: apply through the Udyamimitra portal (udyamimitra.in) or the JanSamarth portal, which forwards your application to lenders.
- The lender appraises your activity and cash flow, then sanctions the amount in the matching category.
Frequently Asked Questions
Is there a subsidy in Mudra loans? No, PMMY itself is not a subsidy scheme — the benefit is collateral-free credit with a guarantee cover.
Can I take a Mudra loan for buying a vehicle? Yes, commercial-use vehicles such as e-rickshaws, autos and goods carriers qualify as income-generating assets.
Note: Limits, guarantee terms and portals are updated by the government. Confirm current terms with your lender or on mudra.org.in.